On drug availability, congress is cutting the wrong red tape

Reduce red tape for drugs: ©Fresh Idea - stock.adobe.com

Living with a chronic disease isn't just physically taxing -- it's also financially draining. On average, healthcare costs for patients with a chronic condition are five times higher than for those without one.

That makes it galling that chronic disease patients are getting hit with high drug costs when cheaper generics are available. Crohn's disease sufferers, for example, pay coinsurance for a drug that has a nearly identical generic available for just a sixth of the price. Diabetes patients, meanwhile, struggle to access generic insulin, as insurers often push them toward more expensive brand-name products.

Many chronic disease patients rely on biologics, medicines made from living organisms and often administered by injection or infusion. Just like medications that come in pill form, biologics have generic versions, called biosimilars. These, on average, cost half as much as their brand-name counterparts. If more widely adopted, biosimilars could save the U.S. healthcare system billions of dollars. And studies show that wider uptake could save individual patients as much as $1,800 to $5,500 a year.

Congress aims to expand the availability of biosimilars with a new bill, the Biosimilar Red Tape Elimination Act. It's supposed to create more choice, more competition, and lower prices. Unfortunately, the proposed bill won't have the effect its sponsors hope. It also fails to address anti-competitive practices that currently hinder access to biosimilars.

If a biosimilar is all but identical to its brand-name counterpart, the FDA considers it ''interchangeable.'' That means the pharmacist dispensing the medicine can substitute one for the other without having to get approval from the prescribing physician.

But new biosimilars and generics aren't automatically granted interchangeable status. Under current law, the FDA decides whether additional data or studies are required. If they are, the biosimilar or generic must demonstrate that it produces the same clinical benefit as the original brand-name drug, which is known as the reference drug.

The Biosimilar Red Tape Elimination Act would get rid of interchangeability determinations altogether, taking the matter out of the FDA's hands. But this hardly seems like a necessary step, given that these determinations aren't currently required in every case. Moreover, it makes no sense to reduce standards for biosimilar approval while leaving standards for approving generics intact.

Worse, with the FDA no longer able to decide if a biosimilar meets the scientific and safety bar, the agency would have to be far more cautious about approving original biologics. This would keep innovative new drugs from reaching the people who need them. Plus, currently available biologics would face less competition from new ones, even as the science evolved and better options became available. Ultimately, physicians and patients would have fewer options.

Meanwhile, the bill before Congress does nothing about the true culprits barring patient access to approved biosimilars. The industry middlemen known as pharmacy benefit managers have enormous influence over which drugs insurers cover. Too often, PBMs push patients toward higher-cost drugs, because they receive rebates from pharmaceutical companies based on list price. These discounts should go to help patients, but instead PBMs use them to pad their profits.

Consider Humira, a popular but expensive autoimmune drug used to treat Crohn's disease and rheumatoid arthritis. There are ten biosimilars for Humira, yet more often than not, PBMs have insurers cover the costlier brand-name drug. Or look at insulin availability. Even before the $35 cap on insulin, cheaper generics were readily available -- but only about 5% of available Medicare plans covered them.

While PBMs are supposed to secure the best deal for patients, recent investigations reveal that they prioritize their own proceeds. The Federal Trade Commission is currently suing the three largest PBMs for favoring brand-name insulins that cost patients more. And studies show that PBMs frequently exclude biosimilars from their formularies, which means that many medicines used to treat chronic disease are less likely to be covered.

Our lawmakers had the right idea when they set out to improve patient access to biosimilars. But they're cutting the wrong red tape. Instead of undermining access to biologics, they should insist that PBM rebates negotiated on behalf of patients go directly to patients, and require greater transparency from the industry in general. Chronic disease patients would reap the rewards.

Kenneth E Thorpe, PhD is the Robert W Woodruff Professor of Health Policy at Emory University. He is chairman of the Partnership to Fight Chronic Disease.